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Old 06-16-2005, 11:00 AM
adios adios is offline
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Join Date: Sep 2002
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Default Re: Shorting party poker

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Number one reason being that incredible growth is already priced in and certainly not sustainable.

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Probably but not sure about that.

From a web site:

Party Poker IPO Article

Upon the announcement that Party Poker's parent, Party Gaming, might pursue a public offering on the London Stock Exchange, financial publications speculated the value of the IPO could be as much as a staggering $10,000,000,000. That number is based on a comparison to Sportingbet PLC. In October 2004, Sportingbet purchased the (at the time) number three online poker cardroom, Paradise Poker, for between 300 and 400 million dollars (depending on performance figures for the next year). At the time of purchase, Sportingbet traded for about 100 on the London Exchange. Only three months later, at the time of the PartyPoker announcement, it was trading at 235.

Since Sportingbet is trading now at about twenty times next year earnings, and PartyGaming is speculated to make in excess of 500 million dollars in 2005, that leads to the ten billion dollar number. That seems a bit high, but still, a Party Gaming IPO should end up between eight and ten billion, immediately establishing it as one of the 100 largest companies on the London Exchange.


Doesn't seem to be incredibly expsensive given a forward looking PE of 20 for next year but that's all I'm going on which admittedly isn't much. If PartyGaming margins are high (which I suspect they are), then I'd say even with increased competition they'll make a lot of money. Not sure about PartyGaming financials at all though. I'll try and find out more. Interesting, nice post and FWIW I commend your use of the 'old noodle' on this [img]/images/graemlins/smile.gif[/img].
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